An important set of contract terms manages potential disputes. In a detailed, hand-coded sample of mergers and acquisition (M&A) contracts from 2007 and 2008, dispute management provisions in correlate strongly with target ownership, state of incorporation, and industry, and with the experience...

This chapter presents a strategic model of incentives for care and litigation under asymmetric information and self-serving bias, and studies the effects of damage caps. Our main findings are as follows. First, our results suggest that the defendant's bias decreases his expenditures on accident...

This paper presents a model analyzing the potential for an International Court with powers to declare standstills to mitigate the coordination problem inherent to roll-overs in sovereign debt markets. It is shown that, regardless of the quality of the information handled by such an Institution,...

We formulate a pretrial negotiation problem as an infinite horizon bargaining model with one-sided uncertainty and alternating offers, with the informed party having an outside option. The plaintiff has private information and also has an outside option of quot;going to court.quot; The defendant...

An injurer undertakes precautions to reduce both the probability and the severity of an accident. The damages that the victim suffers are privately observed, and will be verified at a cost if the case is litigated. While finely tuned damage awards induce the injurer to take appropriate...

Prior research finds that firms' qualitative disclosures subject firms to shareholder lawsuits. However, federal securities laws provide a safe harbor intended to shield firms' forward-looking statements from legal liability. One implication of this safe harbor is that litigation risk...

We provide a simple framework in which the level of adversarial bias is endogenously determined in a litigation process. Using this model, we study the effect of using a court-appointed expert on the level of adversarial bias and the average error rates, and find an interesting trade-off:...

Courts assessing compensatory damages awards often lack adequate information to determine the value of a victim's loss. A central reason for this problem, which the literature has thus far overlooked, is that courts face a dilemma when applying their standard information-forcing tool to the...

Concerned about evidence distortion arising from litigants' strong incentive to misrepresent information to fact-finders, legal scholars and commentators have long suggested that the court appoint its own advisor for a neutral piece of information about the dispute. This paper studies the...